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Veteran Advisor

Pre-USDA Acreage & Stocks Talk

Big (record) acreage, tight old-crop stocks, seems to be the consensus of the trade's thoughts on Monday's Report. What about you?

 

Here is what Allendale Inc. is thinking:

 

"In each of the past five late planted years corn acres increased on the June Acreage report. Other factors, more than planting pace, determine June acreage. From March 1 to May 15 the potential corn revenue per acre increased by $15. During the time the potential soybean revenue increased by $22 per acre.
 
Corn planted acres are expected to increase 385,000 from USDA's March Prospective Plantings survey. This is the fourth largest acreage in modern times.
 
Soybean acres are expected to increase by 1.711 million acres. This is a record soybean planting.
 
Wheat acres are seen 194,000 lower than the March survey. A reduction in spring wheat, of 151,000 acres, was responsible for most of the change. This is the second lowest acreage in 40 years," Allendale Inc. stated in a pre-report statement.
 
                                                              
Prospective Plantings in million acres
                          
                   March
                USDA 2014            Allendale
Corn              91.696               92.081          
Soybeans          81.493               83.204            
All Wheat         55.815               55.621          
Winter Wheat      42.007               41.961          
   Hard Red       30.200               30.183
   Soft Red       8.430                8.456
   White          3.350                3.322
Durum             1.799                1.802            
Other Spring      12.009               11.858          
   Hard Red       11.300               11.156
   White          .709                 .702
 
Quarterly Grain Stocks in billion bushels
 
          06/13   03/14      Allendale
Corn      2.766   7.006        3.646                 
Beans     .435    0.992        .344               
Wheat     .718    1.056        .593     

 

Mike

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8 Replies
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Honored Advisor

Re: Pre-USDA Acreage & Stocks Talk

Please note the acres for wheat in this Allendale projection.

 

All 55m  of that 42 m is winter wheat.

 

HRW is over 30m acres -------------- the next closest variety of any kind is just over 11m acres.

 

Yet it is not important enough to quote. 

 

Hrw --6/24 ---------- $7.05    down 7

 

 

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Honored Advisor

Re: Pre-USDA Acreage & Stocks Talk

Where is the millions of last year's 'pp?

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Veteran Contributor

Re: Pre-USDA Acreage & Stocks Talk


Forget the beef !!! Where tha wheat !!!???
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Veteran Contributor

Re: Pre-USDA Acreage & Stocks Talk

North ok and central Kansas wheat is being over taken with grass and weeds !!!!! Ins. Will 0 it out my adjuster said!!!
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Honored Advisor

Re: Pre-USDA Acreage & Stocks Talk

NW Ohio losing acres tonight........the floods have arrived here.

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Advisor

Re: Pre-USDA Acreage & Stocks Talk

I'm sure aloe dale is wrong like the panel was in the winter.

Nobody knows
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Veteran Advisor

Re: Pre-USDA Acreage & Stocks Talk

Here's a little back-and-forth with Mike North, Sr. Risk Advisor with First Capital Ag.

 

Q: What will be the most watched figure in Monday's Reports? Is there one that sticks out and why? I'm hearing its acreage for corn and beans, but only old-crop stocks for soybeans that is highly watched.

 

North: I would concur with your comments.  The acreage is in question for two reasons 1.  How accurate were the planting intentions reported?  2.  What amount of shifting took place in the northern tier of the corn belt due to wet conditions?
 
Q: Is there any way this report can be bullish? It seems that even my barber is bearish. How does the USDA pull off a neutral or price-supporting element in these numbers? What category has the best potential? 

 

North: The report can be bullish if bean stocks are tightened further or if corn acres are trimmed significantly (Roach is suggesting a 2 million acre decline is necessary).
 
Q: Will this report set the tone or keep the negative price tone rolling for the summer? Or, does this report have a chance to change the downward momentum? 

 

North: Once the report is released, weather will again take center stage.  Given the forecasts for mild pollination conditions for most of the corn belt, a negative tone is likely.
 
Q: I understand that commercials are really long soybeans. Do they use this opportunity to liquidate? I know they have already been doing some liquidation. Will this Report push them to do even more? 

 

North: The commercials will remain long until they are given a sense of comfort both about the old crop balance sheet and the potential of the crop in the field.  This is reflected in the forward curve.  Prices are discounted along the lines of their needs/expectations.
 
What am I missing? 

 

North: That is the story.  What are the acres.  What are bean stocks?  After the release the next question is what does the forecast say?

 

What do you all think?

 

Mike

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Veteran Advisor

Re: Pre-USDA Acreage & Stocks Talk

Here's yet another perspective on the upcoming USDA Reports. This time, Alan Brugler
President, Brugler Marketing & Management LLC

 

 

"I would agree that the corn and bean acreage numbers are important, and if either is 2 million below the trade guess we should get a respectable rally.   Soybean stocks are important because we are exporting beans we don't think we have, and need evidence from USDA that they exist. Lacking same, prices will have to go back to $15.   I think corn stocks are also important, and 2010 is the role model. We had similar market psychology in 2010, with analysts like Brock and Sue Martin calling for $2.50 corn. Then the corn stocks report came out smaller than expected and a multi-month rally erupted. We aren't as oversold this time as we were in 2010, but we are close."

 

Mike

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